Plan to close Black homeownership gap on chopping block as Dems trim $3.5T bill

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Racial justice advocates fear President Biden is letting them down again — this time by discarding a plan to give $25,000 to low-income Black people and other minorities to help them buy homes.

The homeownership grants are among $327 billion in housing programs that are on the chopping block now that Mr. Biden must scale back his $3.5 trillion social welfare and climate change package to satisfy moderate Democratic lawmakers.

“All of this funding is now at risk of being cut,” said House Financial Services Committee Chair Maxine Waters, California Democrat and member of the Congressional Black Caucus.

She described the possible cuts as another blow to the racial equity agenda.

“Housing is one area where there has been discrimination,” Mrs. Waters said. “If we are to correct the wrongs of the past, housing is one way to do it,” she said.

The home-buying subsidies are a $10 billion program intended to close a homeownership gap in which 42% of Black families own their own homes compared to 72% of white families, according to an analysis by the Urban Institute.

If the program gets axed, Black activists and voters will be forced to reassess Democrats’ commitment to the racial justice agenda. Mr. Biden and his Democrats have already fallen short on promises for racial justice overhauls of policing and election laws.

“We’ll have to ask ourselves how committed we are to addressing racial equity,” said David Dworkin, president and CEO of the National Housing Conference, a left-of-center advocacy group.

Housing isn’t the only area where the racial justice agenda is at risk of being left out in a smaller social welfare and climate change bill.

Proponents of expanding Obamacare and tuition-free community college also say those plans to help address racial inequities will be curtailed.

The previous backtracking on racial justice has already registered in the polls. Mr. Biden has seen his support drop among Black voters, dropping from 85% approval in August to 67% in September, according to a Pew Research Center poll.

What’s more, the downsizing of the package would come after Black Democratic lawmakers like Rep. Jamal Bowman of New York have said for months they do not want a repeat of the racial inequities of the New Deal. Some academics on the left have said President Franklin Delano Roosevelt’s social policies disproportionately benefited White people because it excluded Blacks from some portions of the program including homeownership loans.

Under the $10 billion plan pushed by Ms. Waters, the federal government would give a $20,000 in down-payment assistance to those who would be the first in their families to own a home.

An Urban Institute study estimated that 36% of the roughly 4 million families that would get the aid would be Black, even though they make up only 13.4% of the U.S. population.

In addition, the proposal would give an additional $5,000 of down payment assistance to those in “socially disadvantaged groups.”

The idea has been criticized on the right for being racist by discriminating against White people.

Still, Democrats are not on the same page about how to address the homeownership gap. Senate Finance Committee Chairman Ron Wyden, Oregon Democrat, proposed a $15,000 tax credit to all first-time homebuyers regardless of whether others in their family have owned homes. His plan also would not give extra money to “socially disadvantaged” groups.

Meanwhile, proposals to expand Obamacare and begin covering dental care through Medicare are also touted as helping minorities. Democrats want to create a new government program to provide government health care coverage to 2 million people who are still uninsured in 12 Republican-led states that chose not to expand Medicaid under Obamacare.

Sixty percent of those who would gain insurance would be people of color, according to a study by the liberal Center on Budget and Policy Priorities.

Forty-seven percent of seniors did not go see a dentist in 2018. But the number was greater for minorities, said Dan Adcock, government relations and policy director for the National Committee to Preserve Social Security and Medicare, citing a study by the Kaiser Family Foundation. Sixty-eight percent of Black seniors and 61% of Latino seniors did not get dental care, compared to 43% of older White people.

For now, the narrow margins in Congress and a standoff between moderate and progressive Democrats assure cuts to the $3.5 trillion package.

It is testing the Democratic Party’s commitment to racial justice, which is vying with the climate change agenda and scores of new benefits for a broader group of low-income and working families.

Moderate Democrats, most notably Sen. Joe Manchin III of West Virginia, have said that he would not support spending more than $1.5 trillion on the spending spree.

Mr. Biden has acknowledged he will have to cut the bill to between $1.8 trillion to $2.1 trillion.

Rep. Pramila Jayapal, chairwoman of the Congressional Progressive Caucus, has proposed saving money by funding all the programs in the package for five years instead of ten years as originally planned. But others on the left worry that Congress could be in Republican hands when programs such as the Obamacare expansion would have to be reauthorized, potentially ending the program at that time.

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